- Normal pay cycle - figures are calculated for a whole, single pay period ending on the specified date*. All active members with payroll records are included. This mode is used in most scenarios.
- Irregular payment - figures are calculated for an arbitrary period. Members are added to the payment as needed. This mode is used to make corrections, pay bonuses, etc.
- Termination payment - used to pay members upon termination. Figures are calculated for part of a pay period only and members are added manually. By default, the members' entire annual leave and/or public holiday balances are paid out as a lump sum.
* - A pay period is defined as starting on the 'period ending' date from the previous pay period; working hours and leave occurring on the 'period ending' date are not included in the pay period. (As payroll is often processed on this date, the working hours and leave for the day have not been finalised at the point of processing)
In all modes, members can be added or removed from the payment. Multiple payments can be posted per pay period, allowing for a piecemeal approach to payroll. The members'
payroll settings as at the end of the period are applied. Regardless of the type of employee, it is initially assumed that the maximum number of hours (minus any recorded leave) have been worked.
Before you begin
Members should consider the following before commencing the payroll activity:
Figures
The amounts paid/withheld/journalled are determined by the following values:
- Hours
- Hours - Number of hours worked, excluding leave, including AWOL (i.e. hours the member is supposed to have worked)
- Rate - Effective rate per hour (automatically determined using payroll settings)
- Annual leave
- Taken - Total annual leave hours recorded during the period
- Payout - Number of hours of leave paid out in this period
- Loading - Annual leave loading (calculated automatically using payroll settings)
- Sick leave
- Taken - Total sick leave hours recorded during the period
- Public holidays
- Taken - Total public holiday hours recorded during the period (these can be posted automatically, based on the practice's list of holidays)
- Payout - Number of hours of leave paid out in this period
- Other leave
- Bereavement - Bereavement leave hours recorded during the period (paid)
- Maternity - Maternity leave hours recorded during the period (unpaid)
- AWOL - Number of AWOL hours recorded during the period (unpaid, subtracted from the hours worked)
- Amounts
- Payee super - Dollar value indicating the payee's (voluntary before-tax) superannuation contribution amount (automatically calculated, can be overridden)
- Adjust - Dollar value adjustment to the gross pay amount
- Withheld - Dollar value indicating the tax withheld (PAYG)
- Employer super - Dollar value indicating the employer's (after-tax) superannuation contribution amount (automatically calculated, can be overridden)
Leave subtotals cannot be manually edited; instead
leave records must be posted or deleted to affect the totals.
The calculations performed, therefore, are:
Gross = ((Hours + AnnualLeave + SickLeave + PublicHolidays + BereavementLeave - AWOL + AnnualLeavePayout + PublicHolidayPayout) * Rate) + AnnualLeaveLoading
Net = Gross - PayeeSuper - Withheld + Adjust
Public holidays
Public holidays, like AWOL, are treated as another type of leave, and must be recorded as such. The payroll activity includes a feature to programmatically post the relevant records for the period. For variable hours/casual employees, management should consider whether public holidays should be paid in situations where there is insufficient accrued leave. |
Withheld amounts carried forward
ContactsLaw will pre-populate the value of the Withheld column with the amount used in the previous pay period. It will flag the figure for review if either the gross amount has changed since the previous period, the member's payroll settings have changed since the previous period or if the adjustment column has been populated. Before finalising, ContactsLaw will warn if any flagged figures remain. |
Calculation of tax withheld
ContactsLaw uses plug-ins to automate the calculation of tax withheld. If an appropriate plug-in is installed, you will be able to calculate the Withheld figure for individual members (by right-clicking on the row) or for the entire grid (via the command button at the bottom of the activity).
At the time of writing, calculations are performed via web services maintained by CPMS Pty Ltd. While every effort is made to ensure the accuracy of these calculations, it is still recommended that figures be reviewed before finalising the pay.
The Withheld figure may fail to calculate for the following reasons:
The Gross figure is zero
No Internet connection is available
Tax tables are not available for the requested period
The pay cycle is unsupported
The member's particulars are unsupported
Note that adjustments are not taken into account when calculating tax withheld; however payee superannuation contributions will reduce the gross earnings and thus the tax withheld.
Multiple pay cycles
The payroll activity supports a scenario where some members are on a different pay cycle. When you select the pay cycle on the activity, it will filter the list of members accordingly. A warning is issued if you subsequently change or add members who are on a different pay cycle. In this scenario you must manually specify the date of the end of the pay period, as the default value will correspond to the normal pay cycle.
Finalisation
The draft pay can be saved and recalled at a later point in time. When finalised, all relevant general ledger transactions are posted. Additionally, accruals for annual leave, sick leave and public holiday leave are saved. All figures used to calculate the gross/net amounts are also stored for future reference.
To generate the payment
transactions, the narration, payment method, BSB and account numbers stored against each member are used. They can be manually reviewed and altered before finalising, but changes are not reflected permanently.
If the 'enqueue processing tasks' option is selected, the member completing the activity will be immediately presented with a queue of
tasks to process the payments.
Lodgement
ContactsLaw supports lodgement of payroll records to the ATO/IRD when the appropriate plug-ins are installed, either as part of the finalisation process or as a separate event. When lodgement is successful, the record is stamped with the date/time and name of the member who performed the lodgement. If the record was lodged previously, the "Lodge" button will change to read "Re-lodge".
See also: Single Touch Payroll
See also